GENERAL INTEREST Quick Takes
ExxonMobil signs Louisiana CCS agreement with Nucor
ExxonMobil Corp. has signed a carbon capture and storage (CCS) agreement with steel producer Nucor Corp.
The agreement calls for ExxonMobil to capture, transport, and store up to 800,000 metric tons/year (tpy) of CO2 from Nucor’s plant in Convent, La., and store it at ExxonMobil-owned infrastructure in Louisiana, the companies said separate releases June 1.
The direct reduced iron (DRI) plant produces a raw material used to make steel products including automobiles, appliances, and heavy equipment.
The project, expected to start-up in 2026, will tie into the same CO2 transportation and storage infrastructure as used by ExxonMobil’s CF Industries project, and marks the energy giant’s third carbon capture agreement detailed in the past 7 months, following previous ones with industrial gas company Linde and CF Industries, maker of agricultural fertilizer.
The deal brings the total CO2 ExxonMobil has agreed to remove for customers to 5 million tpy.
JX Nippon farms into Elk-Antelope gas field in PNG
TotalEnergies, operator of the developing Papua LNG project in Papua New Guinea, has farmed out a small portion of its interest in the eastern Highlands retention lease PRL 15 that contains Elk/Antelope gas field to JX Nippon Oil & Gas Exploration.
JX Nippon will farm in for a 2.58% interest. A transaction price has not been disclosed. The percentage interest is prior to the expected PNG Government back-in and is subject to approval from the Papua New Guinea Government’s Department of Petroleum and Energy.
The Elk/Antelope gas and condensate fields will be the source for the 5.6-million tonnes/year (tpy) Papua LNG project with first production expected by end-2027 or early 2028.
Following pre-FEED studies, the joint venture has selected a development concept comprised of onshore and offshore pipelines to send produced gas to a bank of four new electric LNG trains to be constructed near the existing ExxonMobil-operated LNG plant at Caution Bay west of Port Moresby.
A final investment decision for Papua LNG is scheduled for yearend or early 2024.
Upon completion of the farm-in, deal interests in PRL 15 will be TotalEnergies (37.55%), ExxonMobil (37.04%), Santos (22.83%), and JX Nippon (2.58%).
The PNG Government has the right to back in for up to 22.5% interest in the project.
JX Nippon also holds a 4.7% participating interest in the ExxonMobil-led PNG LNG project.
HyNet North West awards Halliburton CCS contract
HyNet North West project in Liverpool Bay, UK, has awarded Halliburton Co. a contract to provide well completions, liners, and monitoring products and services for the project’s carbon capture and storage (CCS) system.
HyNet is designed to store 10 million tonnes/year (tpy) of CO2 and produce 4 Gw of low-carbon hydrogen by 2030. Eni UK last year signed MOU with 19 companies to capture, transport, and store emissions in depleted Eni UK reservoirs as part of the project (OGJ Online, Feb. 9, 2022).
Earlier this year, five HyNet partners—Hanson Cement, Viridor, Encyclis, Buxton Lime Zero (Tarmac), and Vertex Hydrogen—were approved by the UK government to move forward to the next stage of decarbonization negotiations. HyNet says the five combined would remove about 3 million tpy of CO2.
Halliburton describes HyNet as the first CCS project commissioned in the UK. It will manufacture and deliver equipment from its UK completion manufacturing center in Arbroath.
Exploration & Development Quick Takes
ConocoPhillips Alaska to tie back Nuna project to KRU
ConocoPhillips Alaska will tie back the Nuna project from the 3T drillsite to its existing Kuparuk River Unit (KRU) processing infrastructure in Alaska.
Nuna, on the western Alaska North Slope, will add 29 development wells, on-pad infrastructure, and pipelines. Drillsite 3T will be the 49th drillsite developed within the KRU.
Funding for the project has been approved, and construction will begin this year and continue in 2024 with pipeline and on-pad construction. Drilling is expected to begin in late 2024. First oil is anticipated by early 2025, with an expected peak oil rate of 20,000 b/d.
ConocoPhillips acquired Nuna acreage in 2019 from Caelus Natural Resources Alaska, who had already constructed the gravel road and pad for drillsite 3T (OGJ Online, June 19, 2019).
Aker BP receives PDO approval for Tyrving
Aker BP has received approval from the Norwegian Ministry of Petroleum and Energy for the plan for development and operation (PDO) of Tyrving (previously Trell and Trine) in the Alvheim area offshore Norway.
The Tyrving development will utilize the planned extended lifetime for Alvheim field, increase production, and reduce both unit costs and CO2/bbl.
Total investments are about $700 million. Production is scheduled to start in first-quarter 2025.
Recoverable resources at Tyrving are estimated at about 25 MMboe. Tyrving emissions are estimated at 0.3 kg CO2/bbl.
Aker BP is operator at Tyrving (61.6%). Partners are Petoro AS (26.84%) and PGNiG Upstream Norway AS (11.9%).
TotalEnergies discovers oil, gas at Ntokon offshore Nigeria
TotalEnergies SE has discovered oil and gas at Ntokon on OML102 offshore Nigeria. In shallow waters 60 km off the southeast coast, the Ntokon-1AX discovery well encountered 38 m of net oil pay and 15 m of net gas pay, while its side-track Ntokon-1G1 encountered 73 m of net oil pay, in what the company described as well-developed and excellent quality reservoirs.
Ntokon-1G1 tested successfully up to a maximum rate of about 5,000 b/d of 40° API oil.
Ntokon is 20 km from Ofon field infrastructure on OML102 and TotalEnergies plans to develop it via tie-back. OML102’s remaining recoverable reserves total roughly 80 MMboe.
The company last year started production of the Ikike tie-back on OML99 (OGJ Online, July 25, 2022).
OML 102 is operated by TotalEnergies EP Nigeria (40%), alongside partner NNPC Ltd. (60%).
Equinor awards Aker Solutions subsea development contract
Equinor ASA has issued a letter of award (LOA) to Aker Solutions ASA to supply the subsea production system and control umbilical for the Eirin field development in the Norwegian North Sea. Development will use a subsea tieback to the Gina Krog platform via existing infrastructure.
Final contract award is subject to approval and final investment decision by the Eirin partners (Equinor, 78%, operator; Kuwait Petroleum Corp., 22%). Under the terms of the LOA, Aker Solutions will start preparations to meet timeframes for delivery of the equipment.
The package will comprise a subsea production system including two vertical subsea trees, a two-slot template and manifold with high-integrity pressure protection system (HIPPS), control system, a control umbilical, and associated equipment. Main deliveries will follow in 2024 and 2025 to meet a targeted 2028 start of production.
Eirin, north of the Sleipner and Gina Krog fields, was discovered in 1978 and has estimated recoverable reserves of 235 bcf.
OMV Petrom discovers 30 million boe in southern Romania
OMV Petrom SA has discovered 30 million boe of recoverable crude oil and natural gas in the Oltenia and Muntenia regions of southern Romania, equivalent to around three quarters of OMV Petrom’s 2022 production. Exploration drilling and testing of the three wells involved took place between June 2022 and April 2023.
One of the discoveries was in the Verguleasa exploration area, in the Oltenia region. The company has identified crude oil resources there totaling around 20 million boe, describing it as its largest crude oil discovery in decades. OMV Petrom said the discovery’s proximity to another production area will allow for more rapid development.
Another discovery took place in the Târgovis,te exploration block, where crude oil resources total an estimated 6 million boe. Successful testing was carried out in April 2023 and pre-exploitation work is in preparation, OMV Petrom said.
A third discovery was made in the Târgu Jiu exploration block, identifying natural gas resources of 7 million boe, equivalent to almost one third of Romania’s natural gas production in 2022, according to OMV Petrom. One follow-up well is already planned for next year and preparations for a tie-in are ongoing.
OMV Petrom is also nearing final investment decision on its Neptun Deep natural gas field in the Black Sea. The company would develop Neptun Deep and the accompanying 308-km Tuzla-Podisor export pipeline with state-owned Romgaz SA and Transgaz SA, respectively (OGJ Online, Apr. 3, 2023).
Drilling & Production Quick Takes
CGX Energy finishes bypass, appraisal well offshore Guyana
CGX Energy Inc. successfully reached TD of 20,450 ft on the Wei-1BP1 bypass exploration and appraisal well in Corentyne block, offshore Guyana. The original Wei-1 wellbore reached a depth of 19,142 ft.
Wei-1BP1 was drilled from 18,757 ft to TD and penetrated its primary Santonian targets in the western complex in the northern portion of the block. Before the bypass, the well encountered an aggregate of about 71 ft of net oil pay in the secondary target reservoirs in the Maastrichtian and Campanian. Following the bypass, data collected from logging while drilling and cuttings indicated multiple hydrocarbon shows in the primary target reservoirs in the Santonian interval.
Initial results were consistent with pre-drill expectations. CGX described them as encouraging and said data acquisition is ongoing via wireline logging, MDTs, and side-wall core sampling. A results update will be provided when data acquisition and evaluation has been finalized.
The well was drilled by CGX (32%) and Frontera Energy Corp. (68%).
Beacon subsidiary mobilizes rig for Schwarzbach-2 development well
Beacon Energy subsidiary Rhein Petroleum GmbH has advanced plans to drill the Schwarzbach-2 (SCHB-2) development well within Erfelden field, onshore southwest Germany.
The E202 drilling rig—fully crewed and contracted from RED Drilling & Services GmbH—was scheduled to be on location and operational by June 19. Drilling operations are expected to take about 25 days to reach the expected TD drilling depth of 2,255 m, with an additional 12 days planned for reservoir clean-up and production testing.
The drilling pad is sited next to the Rhein Petroleum-owned and operated Schwarzbach production infrastructure. Once completed, SCHB-2 is expected to be tied-in to enable immediate production, the company said.
The well is the first of four potential development wells to be drilled at Erfelden over the next 2 years.
PROCESSING Quick Takes
TotalEnergies to boost SAF production at Grandpuits
TotalEnergies SE will more than double production of sustainable aviation fuel (SAF) from its original 2020 plan as part of the operator’s Project Galaxie conversion of its former Grandpuits conventional refinery in northern France into a zero-crude industrial platform.
The company has reached final investment decision to increase SAF production at the Grandpuits platform to 285,000 tonnes/year (tpy), up from an originally planned target of 170,000 tpy announced in 2020, TotalEnergies said on June 7.
The new investment responds to the European Union’s (EU) recent mandate under the ReFuelEU deal for aviation fuel suppliers to ensure that all fuel made available to aircraft operators at EU airports contains a minimum 2% share of SAF from 2025, 6% by 2030, 20% by 2035, up to a maximum of 70% by 2050, according to TotalEnergies and separate releases from the European Council and the International Air Transport Association.
TotalEnergies also confirmed it will proceed with construction of an 80-GWhr/year biomethane production unit (BPU) that will use a feedstock of organic waste from the Grandpuits biorefinery.
Equivalent to the annual demand of 16,000 people, biogas production from the planned BPU will prevent nearly 20,000 tpy of CO2 from Grandpuits, according to the operator.
Upon unveiling the proposed SAF expansion and BPU projects, TotalEnergies also confirmed cancellation of a previously announced plan by TotalEnergies Corbion PLA BV—a 50-50 joint venture of Total and Corbion NV—to build Europe’s first polylactic acid, or polylactide (PLA), plant at Grandpuits.
Following a decision by Corbion not to pursue the estimated €200-million plant that was to be equally funded by the partners, the proposed 100,000-tpy PLA bioplastic production project will now be discontinued, TotalEnergies said.
TotalEnergies—which did not reveal budgets for the SAF or BPU projects—said that with these two new investments and others to come—that it will maintain all 250 jobs at Grandpuits.
TotalEnergies—which discontinued crude oil refining at Grandpuits in first-quarter 2021 and will cease storage of petroleum products at the site by late 2023—most recently said it remains on schedule to commission new units at Grandpuits in 2022-24 to reach full operation of the zero-crude platform by 2025.
Supplying SAF to French aircraft operators since 2021, the operator also began producing SAF in early 2022 at its 253,000-b/d integrated Normandy refining and petrochemicals platform in Gonfreville l’Orcher, France.
The company previously said it is working on pilot units near its 227,000-b/d Leuna refinery in central Germany to make molecules that can be converted into methanol and SAF using green hydrogen and captured CO2.
Irving Oil evaluating company’s future
Irving Oil Ltd. has undertaken a strategic review to evaluate the Canadian-based refining and marketing company’s future.
While no final decisions have been made about where the strategic review may lead, the operator is considering a series of options, including a new ownership structure, a full or partial sale, or a change in the portfolio of company assets and how they are operated, Irving Oil said in a June 7 statement.
“As we evaluate our options in the coming months, our focus remains on our team and continuing to safely deliver quality products and reliable energy for our customers and communities,” the operator said.
Irving Oil owns and operates its 320,000-b/d St. John refinery in the eastern Canadian province of New Brunswick, as well as the 75,000-b/d Whitegate refinery in County Cork, Ireland.
bp completes investment projects at Cherry Point refinery
bp PLC has finished a series of earlier proposed investment projects aimed at improving reliability and efficiency, reducing emissions, and expanding renewable diesel production at its 238,450-b/d Cherry Point refinery in Blaine, Wash., near Bellingham.
After a year and a half of work, bp in early June completed works related to installation of the Cherry Point hydrocracker improvement project’s (HIP) new vacuum tower, as well as the site’s separate cooling water infrastructure (CWI) project, Eric Zimpfer, bp Cherry Point’s vice-president of refining, said in a post to his official social media account.
“The new vacuum tower and [CWI] projects will reduce refinery emissions by more than 5%, the annual equivalent of taking 28,000 cars off the road,” Zimpfer said.
The announcement follows bp’s late-2022 completion of a $45-million renewable diesel optimization (RDO) project that doubled the refinery’s renewable diesel production capacity to 2.6 million bbl/year.
First announced in October 2021, the trio of projects came as part of a nearly $270-million combined investment at Cherry Point to reduce the refinery’s operational CO2 emissions by about 7%, from then-existing levels and double the site’s output of renewable diesel.
Designed to improve the refinery’s efficiency and reduce periods of planned maintenance to result in fewer unit shutdowns and associated flaring events, the estimated $169-million HIP was designed to enable the hydrocracker to consume less hydrogen—which Cherry Point produces by conversion of natural gas in process that yields CO2 emissions—as well as reduce its current heat input requirement from the consumption of gaseous fuel in refinery process heaters.
Alongside construction of a new process-structure area, motor control building, pipe rack supports, and associated equipment foundations, HIP also was to include installation of a new vacuum tower, as well as relocation and installation of underground utilities within existing operational areas of the refinery, according to a December 2020 project description by Washington state regulators.
The estimated $55-million CWI project was to involve upgrading the refinery’s cooling water infrastructure, allowing for increased utilization, better energy efficiency, and a related reduction in CO2 emissions. Alongside improving reliability by enabling the refinery to maintain a year-round optimum cooling water temperature, increased efficiency of the site’s cooling towers upon the CWI project’s completion was to result in reduced production of light hydrocarbons—such as methane and ethane—combusted in process heaters and utility boilers.
Shell halts operations at Nyhamna gas plant
Shell PLC subsidiary AS Norske Shell has extended planned maintenance work amid an unplanned interruption at the Gassco AS-operated Nyhamna natural gas processing plant and export hub in on Norway’s northwestern coast.
During scheduled maintenance work June 12 to clean a water-based cooling system in the Nyhamna plant, a gas formation with hydrogen was discovered, leading to a precautionary stoppage of all non-critical works.
Shell confirmed Nyhamna remains shut down, with no hydrocarbons currently in circulation.
“Our most important priority is that our employees and contractors have a safe working situation,” Shell said, adding that the incident will have “consequences for the [originally] planned startup of the [plant]” following the scheduled maintenance audit.
With an investigation now under way to understand the cause and scope of the incident, Shell said it is also working on measures to normalize the system and confirm that work can be safely resumed.
With relevant authorities notified of the gas formation discovery, Shell said it is continuing to work closely with operator Gassco, as well as plant contractors and suppliers, to address the issue.
Shell did not reveal further details regarding the incident, nor did it give an anticipated timeframe for when plant operations might resume.
Commissioned in 2007, the Nyhamna plant was initially built as a hub for processing and exporting gas and condensate it received via two 30-in. pipelines from the Norske Shell-operated Ormen Lange deepwater field in 800-1,100 m of water on the Norwegian continental shelf, about 120 km northwest of Kristiansund, Norway. With an original nameplate processing capacity of 70 million cu m/day, the plant was upgraded in 2013-17 to begin receiving additional gas from Equinor ASA-operated Aasta Hansteen and surrounding fields in the Norwegian Sea’s Vøring basin delivered to the Nyhamna terminal by the 482-km Polarled pipeline (OGJ, July 1, 2019, p. 56).
At its expanded capacity of 84 million cu m/day, the Nyhamna onshore plant features a series of processing installations for liquids separation, dehydration, purification, and compression of gas that, post-treatment, is exported along the 1,300-m Langeled pipeline to the UK and continental Europe.
TRANSPORTATION Quick Takes
Germany, Italy reaffirm commitment to SoutH2 pipeline corridor
German Chancellor Olaf Scholz and Italian Prime Minister Giorgia Meloni have reaffirmed their countries’ commitment to building a hydrogen-ready natural gas pipeline. The officials made their remarks at a press conference following a June 8, 2023, meeting in Rome.
The Ministries for Energy of Italy, Austria, and Germany last month signed a joint letter of political support for the development of a “southern hydrogen corridor” in the European Union and for the respective infrastructure projects to obtain the status of Project of Common Interest (PCI). Snam SPA, Trans Austria Gasleitung (TAG) GMBH and Gas Connect Austria (GCA) GMBH, and bayernets GMBH formed a partnership to develop the 4-million tonne/year SoutH2 Corridor, connecting North Africa to central Europe and enabling renewable hydrogen produced in the Southern Mediterranean to reach European consumers.
SoutH2 Corridor, a planned 3,300-km dedicated hydrogen-ready pipeline corridor, will be part of the planned European Hydrogen Backbone and could deliver 40% of the REPowerEU’s hydrogen import target. Participants expect it to be operational as early as 2030. REPowerEU is a European Union program seeking to reduce gas consumption and improve energy efficiency in buildings and industry.
The corridor consists of the following individual PCI project candidates: Italian H2 Backbone (Snam Rete Gas), H2 Readiness of the TAG pipeline system (TAG), H2 Backbone WAG + Penta-West (GCA), and HyPipe Bavaria – The Hydrogen Hub (bayernets).
Shenzen Gas awards LNG expansion EPC contract
Shenzen Gas Corp. Ltd. has awarded TGE Gas Engineering GMBH an engineering, procurement, and construction contract for Shenzhen’s LNG Storage and Peak Shaving II expansion. Scope of work includes two 160,000-cu m full-containment storage tanks, the process plant, and a loading-unloading berth for 3,000-217,000 cu m LNG carriers.
The expansion will boost capacity at the plant to 2-million tonnes/year. TGE will carry out the work as part of a consortium with CIMC Enric Engineering Technology Co. Ltd. and China Construction Second Engineering Bureau Ltd.
TotalEnergies joins Rio Grande LNG project
TotalEnergies SE has signed a framework agreement with NextDecade LNG LLC to participate in development of its 27-million tonne/year (tpy) Rio Grande LNG (RGLNG) plant in Brownsville, Tex. TotalEnergies will hold a 16.7% interest in the first phase of the project, which consists of three liquefaction trains with total capacity of 17.5 million tpy.
TotalEnergies will offtake 5.4 million tpy of LNG from Phase 1 for 20 years, bringing its US LNG export capacity to more than 15 million tpy by 2030. It also has options to secure additional offtake from Phase 2 and participate in a carbon capture and storage project planned by NextDecade to reduce the plant’s emissions.
The first phase of RGLNG, whose final investment decision is expected by end second-quarter 2023 for start-up in 2027, will now be developed by NextDecade as shareholder and operator, Global Infrastructure Partners as majority shareholder, and TotalEnergies. The project has already received all necessary authorizations from the US Federal Energy Regulatory Commission.
NextDecade earlier this year notified the Securities and Exchange Commission of amendments to its agreements with Bechtel Energy Inc. for engineering, procurement, and construction contracts on Phase 1 of the plant. The amendments locked in agreed upon pricing until June 15, 2023, and followed NextDecade missing a deadline to issue Bechtel a notice to proceed with construction (OGJ Online, Mar. 16, 2023).